October 4th 2018 brought the end of the childcare voucher scheme for new entrants. The scheme has enabled employers to assist staff with the cost of childcare by allowing employees to sacrifice some of their salary in return for subsidised childcare costs.
Individuals already enrolled in schemes are unaffected by the change and will continue to receive the benefit however they will not be able to re-join if they leave and they will not be able to sign up for another employer’s scheme if they change jobs.
The government has replaced the childcare voucher scheme by tax-free childcare run through HM Revenue & Customs (HMRC). The two methods of assisting with childcare costs differ in how they operate, and employees could be worse off if they decide to opt for the new HMRC arrangements rather than staying in the childcare voucher scheme where they are already enrolled.
The change has had a mixed response from employers and those organisations and bodies supporting flexible working.
Employers are advised to communicate the change to staff if they have not done so already and amend any relevant benefits’ information.
For more information on employee benefits please contact Halcyon HR Consulting Ltd.